Schafer: Solution to 'skills gap' is investment in training

Anyone who manages a workforce with lots of welders should know the number 57.

That’s the average age of a welder in this country, according to the Boston Consulting Group’s Hal Sirkin, a senior partner who co-authored a recent report on the so-called “skills gap.”

A great many welders are going to quit welding more or less at once, Sirkin said, and that will lay bare just how much more employers are going to need to invest in training.

He sees no critical skills gap right now except in a handful of local areas, but there sure is one coming. “These trends are going to start hurting U.S. competitiveness if we don’t start training more,” Sirkin said.

Employers weren’t simply shortsighted when they cut budgets for training. They became increasingly reluctant to fund upfront training when many trainees later would walk out to work for competitors, and manufacturers were in the fight of their lives as globalization accelerated.

As employment in manufacturing fell from a peak of more than 19 million in 1979 to around 12 million today, skilled people trained by others were nearly always available. But it’s the end of the road for that strategy.

“Once everybody is expecting someone else to train people,” said Peter Cappelli, professor at the Wharton School at the University of Pennsylvania, “then it becomes this massive problem.”

“What’s quirky about this now,” he added, “is that even in this recession, when there is a glut of talent by any historical or comparable measure, you have still got employers complaining.”

Cappelli said the only real evidence of a skills gap is complaints from employers, and complain they do. In a survey of 500 top executives just released by Adecco, 92 percent of them agreed that there is a skills gap.

Cappelli, who has written extensively about the changing relationship between workers and their employers, said he is optimistic as the debate over causes has begun shifting. He doesn’t hear nearly as often as he used to that the skills gap is the fault of a broken education system or of the workers themselves.

It’s also important to note that I had conversations in the past week with employers who continue to spend heavily on training — and an estimated $156 billion got spent on training by employers in 2011. But they aren’t the ones complaining about a skills gap.

Mike Hickey is one of those executives, and he leads the global institutional business of St. Paul-based Ecolab, which hires 350 to 400 new folks a year in the United States and Canada. Hickey started at Ecolab as a “territory manager-in-training” in 1985. It has evolved, of course, but that training program still exists.

“You are not allowed to go out and serve customers the day you are hired,” Hickey said. “We are in a service business. While ours is a manufactured product, it’s really executed through people. When we put the person out there, they are prepared for every facet of the job.”

While much of the discussion over the skills gap has concerned manufacturing skills, the Adecco survey also was revealing in that nearly half of the executives who talked of a skills gap complained of poor skills in areas like communication, creativity and critical thinking.

“Human beings are quick evolvers,” said Cori Hill, a global director of high-potential leadership development for the consultants PDI Ninth House in Minneapolis. “But our economic ecology is changing quicker than we can change. The skills gap is structural. In every part of the enterprise you can see the gaps.”

Like BCG’s Sirkin, Hill said she worries about the long-term competitiveness of U.S. businesses. She said that in Europe, career-long learning is a fixture of a working life.

“To some extent, the question you really want to ask is, who helps the company compete?” Hill said. “If front-line employees like salespeople and engineers … don’t have the skills to deliver on the brand promise, it doesn’t really matter what the creative group is doing or what the leadership group is doing.”

What’s interesting is how the issue of insufficient training turns up in industry after industry, even surprising ones. Certainly no politician or chamber of commerce executive is bemoaning a skills gap among makers of commercial loans, but good luck trying to hire senior bankers who have been through a big bank’s formal credit training.

Paul Bees is partner in St. Paul-based Midwest Financial Search, a recruiting firm focused on filling positions in banking. He got into a 1984 training class at First Bank Minneapolis, then a unit of what’s now called U.S. Bancorp. He remembers it as a 10-month, intensive program, and he sat alongside bankers such as P.W. “Bill” Parker, now U.S. Bancorp’s chief credit officer.

“I think there were 27 people in my class, and as soon as the program was over, one guy left and went to Norwest,” Bees said. “They are expensive to run, and we were training for every other bank in town.”

That kind of training program, what Bees said was once the “keystone” of a promising banking career, became largely extinct.

Bees said his community bank clients are becoming receptive to his advice that they try to hire one or two college graduates per year and train them, because finding bankers who have been through formal commercial-credit training is becoming an all but impossible task.